2015 (10) TMI 542

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....iness Transfer Agreement dated 26.4.2007 (in short, BTA) whereunder, the company purchased the fixed assets, current assets, current liabilities, dealer and vendor nertwork, goodwill, material contract including supply and sales contracts, leasehold properties, after service parts business personnel, operation associated with the assets and such other rights or tangible and intangible properties relating to the CCP business for a total consideration of Rs. 425,25,00,000/-. 3. According to the petitioner, for the assessment year 2008-09, return of income was filed on 30.9.2008 declaring a total loss of an amount of Rs. 17,58,19,692/- and book profit under Section 115 JB of the Act, of an amount of Rs. 55,38,41,237/- along with complete and detailed financials and a statement of Memo of income setting out the methodology for computation thereof. In so far as the BTA comprised of various assets in respects of which, the petitioner was entitled to depreciation and hence claimed depreciation on vendor and dealer network, amount to a sum of Rs. 75,09,65,951/-. The details of depreciation were duly disclosed in the financials/tax audit report annexed along with the return of income. ....

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....rsuant to notice under Section 142(1), had placed all details including the furnishing of BTA before finalization of the original assessment proceedings; v) that the impugned re-assessment was based on an objection by the internal audit party on the interpretation of law, which is impermissible since audit objection cannot form the basis of a reassessment; vi) that though there is a statutory appeal as against the impugned proceedings, however, the petitioner is entitled to invoke writ jurisdiction under Article 226 since the impugned proceedings are patently erroneous, arbitrary and contrary to the settled law; vii) that as regards the reopening of the assessment for the assessment year 2008-09 is concerned, it was initiated beyond four years despite the fact that there was no failure on the part of the petitioner in disclosing material facts. 8. In support of her contentions, the learned counsel relied upon the following decisions; viz., a) "GKN Drivershafts (India) Ltd., versus Income Tax Officer and others" reported in (259 ITR 19), wherein, it has been held as under: "However, we clarify that when a notice under Section 148of the Income tax Act is issue....

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....dment) Acts, 1987 and 1989. After the amendment, the Assessing Officer has to have reason to believe that income has escaped assessment, but this does not imply that the Assessing Officer can reopen an assessment on mere change of opinion. The concept of "change of opinion" must be treated as an in- built test to check the abuse of power. Hence, after April 1, 1989, the Assessing Officer has power to reopen an assessment, provided there is "tangible material" to come to the conclusion that there was escapement of income from assessment. Reason must have a link with the formation of the belief. Decisions of the Delhi High Court in Cit v. Kelvinator of India Ltd. (2002) 256 ITR 1 (FB) and CIT v. Eicher Ltd. (2007) 294 ITR 310 affirmed." 9. With these contentions, the learned counsel sought for setting aside the impugned proceedings. 10. Heard the learned counsel on either side and perused the entire documents available on record. 11. The main purpose for initiating the proceedings for reopening the assessment is that the issue regarding depreciation claim on dealer network and vendor network was not dwelt with during the original assessment under Section 143(3) of the Act. A....

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....the additional information and documents. The Petitioner thereafter filed letter dated 20.11.2014 that they are the only designated/authorized stockists of after sales service parts and accessories for Hyundai cars in India. The Petitioner's representative appeared for hearing on 8.12.2014 and followed by another hearing on 11.12.2014. After considering the submissions along with the records of the Petitioner and the materials on record, the Respondent passed the impugned orders on 31.12.2014 for both assessment years. 13. Therefore, the as rightly contended by the learned counsel for the respondent that the Petitioner did not file any objections to the reasons for the reopening of the above assessments. Thus in the absence of any objection to the reopening, the question of disposing the objections by passing a speaking order before proceeding with the assessment as contemplated by the Apex Court in the case of GKN Driveshafts does not arise. On the other hand the Petitioner having participated in the re-assessment proceedings in pursuant to issuance of notices u/s 143(2), the impugned orders were passed u/s 143(3) read with section 147 in accordance with law. In this regard, it....